The Federal Reserve Board today approved modifications to the settlement finality for ACH credit transactions processed by the Federal Reserve Banks so that settlement becomes final when posted to depository institutions' accounts. The Board will require prefunding for any ACH credit transactions that settle through a Federal Reserve account that is being monitored in real time to help manage settlement risk.

The Reserve Banks will be modifying their software and their ACH operating circular to implement settlement-day finality. To permit time for these changes, settlement-day finality and prefunding will be implemented in early 2001. A specific implementation date will be announced three months in advance of the effective date.